Tags: Buffett | Murphy | ABC | Burke

Quartz: Warren Buffett Reveals an Unexpected Business Mentor

By    |   Thursday, 23 October 2014 01:54 PM

Warren Buffett says that most of what he learned about managing companies came from a source who is not exactly a household name — Tom Murphy, a smart but fairly obscure broadcasting magnate.

The revelation about Buffett's true management mentor came when Lawrence Cunningham, author of the recently published "Berkshire Beyond Buffett," asked Buffett who should write the foreword, Quartz reported.

Buffett immediately suggested Murphy, his friend for the past four decades.

"Most of what I learned about management, I learned from Murph," Buffett reportedly told Cunningham. "I kick myself, because I should have applied it much earlier."

Their association began when Buffett invested in Murphy's company, Capital Cities, a television station company that started small and eventually grew to take over the ABC broadcasting network.

One cult business book about eight great CEOs, "The Outsiders," quotes Buffett as saying, "Tom Murphy and [his long-time business partner] Dan Burke were probably the greatest two-person combination in management that the world has ever seen or maybe ever will see."

"Murphy and Burke used a simple set of rules to build their empire — decentralization, hiring the best possible people and giving them autonomy and imposing rigorous cost controls," Quartz reported, noting that Buffett also embraces all of these.

Murphy managed to return Buffett's praise in his forward to "Berkshire Beyond Buffett." He wrote: "We are both proponents of a decentralized management philosophy: of hiring key people carefully; of pushing decisions down the organization; and of setting overall principles and resisting temptation to be involved with details. In other words, don't hire a dog and try to do the barking."

Quartz offered some anecdotes about Murphy, including one about how he saved money at the first TV station he owned by only painting the two sides of the sides of the building that faced the road.

In an interview with Harvard Business School, which he attended, Murphy recalled that Buffett helped him as a co-investor in the ABC takeover.

"He made a lot of money on it. He deserved every bit of it. He made it possible for us to buy ABC," Murphy said.

"And there's no question that Warren Buffett gave me a great deal of security. He was my 400-pound gorilla, so to speak."

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Warren Buffett says that most of what he learned about managing companies came from a source who is not exactly a household name — Tom Murphy, a smart but fairly obscure broadcasting magnate.
Buffett, Murphy, ABC, Burke
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2014-54-23
Thursday, 23 October 2014 01:54 PM
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